Terrorism presents serious challenges to the traditional balance between liberty and security in liberal democracies. The present thesis explores how nations respond to these challenges. I review case studies of the effects of terrorism on civil liberties in the United States and the United Kingdom. I then provide a multi-year, multi-country quantitative analysis of these same issues for 42 randomly sampled countries. For each country, ratings of civil liberties and political rights were obtained from the Freedom House Freedom in the World ratings for the years 1972-2005. For these same countries, data was obtained on deaths due to terrorism, injuries due to terrorism, and number of terrorist attacks from the Global Terrorism Database. It was found that number of deaths due to terrorism in the three preceding years significantly predicted losses in civil liberties. The relationship between terrorism and loss of political rights was less strong. Neither number of injuries due to terrorism nor overall number of terrorist incidents significantly predicted changes in freedom ratings. Results are discussed in terms of their implications for public policy regarding international terrorism.